Dean Foods Co. Reports 121 Earnings Gain In First Quarter

Dean Foods Co. announced strong first quarter results driven by solid growth across all operating segments, and supported by tight expense control. The company reported first quarter 2012 earnings of $0.20 per diluted share, compared to first quarter 2011 earnings of $0.14 per diluted share. On an adjusted basis, first quarter 2012 diluted earnings per share were $0.31, a 121 percent increase from the $0.14 per diluted share earned in the prior year's first quarter.

First quarter consolidated operating income totaled $123 million, compared to consolidated operating income of $106 million in the first quarter of 2011. Adjusted first quarter consolidated operating income totaled $152 million, a 42 percent increase compared to $107 million reported in the first quarter of 2011.

"Today we announced strong first quarter results, driven by stronger than forecasted growth across each of our three operating segments, and supported by tight expense control across the business," said Gregg Engles, chairman and CEO in a prepared statement. "As a result, consolidated adjusted operating income increased 42 percent above year ago levels.

"Our financial performance was further bolstered by declining interest expense, resulting in first quarter adjusted diluted earnings per share of $0.31, more than double the previous year and the sixth straight quarter we have delivered adjusted EPS at or above our guidance."

Net income attributable to Dean Foods totaled $38 million, compared to net income of $25 million in the prior year's first quarter. Adjusted net income for the first quarter was $57 million, a 129 percent increase from $25 million in the first quarter of 2011.

Net sales for the first quarter totaled $3.2 billion, compared to $3.0 billion of net sales in the first quarter of 2011.

For the first quarter of 2012, the WhiteWave-Alpro segment reported net sales of $571 million, 13 percent higher than first quarter 2011 net sales of $507 million, and the highest net sales in the history of the segment. Strong category growth, and continued investment in brand building, innovation, and marketing drove the first quarter performance.

Among the product categories at WhiteWave-Alpro, sales in the coffee creamers and beverages platform increased more than 20 percent in the first quarter, driven by strong International Delight creamers sales and augmented by the rollout of new iced coffee products. The coffee creamers and beverages platform includes coffee creamers under the International Delight®, Land O'Lakes®, Silk® and Horizon Organic® brands, as well as International Delight Iced Coffee. Sales of plant-based beverages, which includes Silk® soy, almond and coconut milk products, also increased more than 20 percent in the first quarter on accelerating growth of Silk PureAlmond®. Sales of value-added dairy, which includes Horizon Organic® branded milk and other products, increased mid-single digits as mild winter weather resulted in higher organic raw milk supply than initially forecasted and price increases to offset higher milk costs were put into the marketplace. Alpro net sales increased mid-single digits in the first quarter on a Euro basis and were approximately flat after currency translation.

A culture of efficiency and expense control at WhiteWave-Alpro leveraged 13 percent top-line growth to 31 percent operating income growth in the first quarter. For the quarter, WhiteWave-Alpro operating income was $60 million, versus $46 million in the first quarter of 2011.

A more favorable commodity environment and a continued focus on the fundamentals of cost reduction, price realization, and sales volume growth led to a strong quarterly performance at fresh dairy direct. For the first quarter, fresh dairy direct fluid milk volumes increased 0.4 percent on a year-over-year basis. This compares to the balance of the industry that experienced a volume decline of approximately 2.9 percent on a year-over-year basis, based on USDA data and company estimates. Excluding the estimated impact of the September 2011 divestiture of the Waukesha facility, fresh dairy direct fluid milk volumes increased 1.8 percent in the first quarter of 2012.